Concentric Energy Advisors report reveals significant
shortcomings accompany 'competitive' solicitations for regional
transmission projects
NOVI,
Mich., Aug. 16, 2022 /PRNewswire/ -- ITC
Holdings Corp. (ITC) and other members of the Developers Advocating
Transmission Advancements (DATA) Coalition are calling attention to
a new study showing that unintended consequences of the Federal
Energy Regulatory Commission's (FERC) Order No. 1000 include
project cost increases and schedule delays.
The study titled "Competitive Transmission: Experience to Date
Shows Order 1000 Solicitations Fail to Show Benefits" prepared
by Concentric Energy Advisors, reveals that completed and active
competitive transmission projects awarded to non-incumbent
developers experienced an average of 12 months in schedule delays
and 27% in cost increases, contrary to promises made by competitive
developers in winning bids.
Ten years ago, FERC issued Order No. 1000 in response to the
growing challenge of planning and constructing new transmission to
keep pace with national and state energy policy priorities. The
order allows for public utility transmission providers to use
competitive bidding to solicit transmission projects or project
developers. Now a decade later, new emerging data of so-called
"competitive projects" now in service, or in advanced stages of
development, show significant shortcomings.
Using six projects awarded to developers through competitive
solicitations, the study investigated claims that Order No. 1000
solicitations contribute to cost savings and the timely development
of transmission infrastructure.
- One project from New York Independent System Operator's service
territory experienced a 67% cost increase above the developer's
promised cost cap, which is now attempting to be recovered from
customers. This calls to question whether competitive processes
create incentives for outside developers to submit overly
aggressive bids to win projects.
- Another example from the Midcontinent Independent System
Operator (MISO) region found that the final cost for a competitive
project was approximately equal to MISO's planning-level cost
estimate and the average of all the submitted bids, indicating no
benefit from the solicitation.
For the first time, these case studies provide policymakers the
most accurate assessment of the Order No. 1000 competitive
process.
"These results add to the growing case that it is time to move
in a new direction," said Nina
Plaushin, Vice President of Regulatory and Federal Affairs
at ITC and DATA Coalition member. "As FERC considers new reforms to
regional transmission planning processes, it is clear we must
return to a collaborative planning model that has been proven to
result in cost effective transmission infrastructure. At a time
when transmission investment is sorely needed to power our
transition to a clean energy economy and achieve the nation's
climate goals, there is no time to waste."
The study was prepared on behalf of the DATA Coalition, a group
of transmission-owning utilities consisting of Ameren, Eversource
Energy, Exelon Corporation, ITC Holdings Corp., National Grid
USA, Public Service Electric and
Gas Company and Xcel Energy.
ABOUT ITC HOLDINGS CORP.
ITC Holdings Corp. is the largest independent electricity
transmission company in the United
States. ITC provides transmission grid solutions to improve
reliability, expand access to markets, allow new generating
resources to interconnect to its systems and lower the overall cost
of delivered energy. Through its regulated operating subsidiaries
ITCTransmission, Michigan Electric Transmission Company, ITC
Midwest and ITC Great Plains, ITC owns and operates high-voltage
transmission infrastructure in Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma, and in development in Wisconsin. These systems serve a combined peak
load exceeding 26,000 megawatts along 16,000 circuit miles of
transmission line, supported by 700 employees and 1,000
contractors. ITC is based in Novi,
Michigan. For further information
visit WWW.ITC-HOLDINGS.COM. ITC is a subsidiary of
Fortis Inc., a leader in the North American regulated electric and
gas utility industry. For further information
visit WWW.FORTISINC.COM.
About Concentric Energy Advisors
Concentric Energy Advisors specializes in management
consulting and financial advisory services focusing on the North
American energy and water industries. Through its subsidiaries, CE
Capital Advisors and Concentric Advisors ULC, Concentric provides
capital market advisory support and consulting services in
Canada.
View original
content:https://www.prnewswire.com/news-releases/study-shows-order-no-1000-transmission-solicitations-have-not-yielded-customer-savings-or-improved-transmission-development-timelines-301606888.html
SOURCE ITC Holdings Corp.
